September 8

Akhand Jyoti Tiwari / Maha Khan

The Volatile ‘Face’ of Digital Financial Services in Zambia

Patrick, deputy manager of operations of a digital financial service provider in Zambia, is on his quarterly monitoring visit in Kafue, 60 kilometres from Lusaka, when he, yet again, encounters three new agents at different outlets in the area. High churn rates seem to be a recurring theme on his visits to different parts of Zambia, and he’s worried. He is convinced this is not good for his digital financial services (DFS) business. What can Patrick do?

The 2015 ANA Zambia Country Report highlights that three-fourths of agents in the country are operators – i.e. staff employed by owners of the mobile money business to work at their outlet. Further, qualitative research indicates that owners run multiple booths in an area. While this phenomenon indicates that owners find the mobile money business fruitful, research also finds that there is high turnover amongst Zambian operators. This means that both service providers and owners have to train continuously and mentor a new wave of operators, only for them to leave. In turn, these operators may not be sufficiently trained, or perhaps may not be willing to invest their time and knowledge in the business.  With only half of Zambians aware of the concept of mobile money, changing the “face” of DFS could potentially hinder the adoption of DFS.

Operators Don’t Stick

A large chunk of operators – 90 percent – have been in the mobile money business for less than one year, compared to 77 percent of owners. In fact, the operator-to-owner ratio of agents who have been in business for less than one year is 78:22, while for those who have been in the business for three years or longer it’s 48:52. This is telling; operators don’t seem to stick around for very long. Why is that?

While qualitative research can unearth operators’ motives, findings from ANA Zambia shed some light. Operators are less likely to see themselves as agents in a year from now compared to owners (55 percent versus 81 percent, respectively) as they primarily feel that the business is not profitable enough for them. This may not be very surprising given that the median monthly earning for an agent (owners only) is US $180 (purchasing price parity – PPP – adjusted), which is below the national Gross National Income (US $308 PPP adjusted). This indicates that owners may not have the sufficient resources to spend on salaries and, in fact, operators earn much less than owners – the median salary of an operator is US $125 (PPP adjusted). As for their motivation, a little fewer than half of operators indicate that their salaries are not enough to encourage them to try actively to increase the business as an agent.

How Untrained Operators Can Impact DFS Adoption

With a high percentage of operators in the market, the onus falls on both the service provider and the owner to ensure that operators are well trained on the technical aspects of delivering mobile money as well as on customer service aspects in terms of selling mobile money to customers. To do this well, training needs to take place consistently over time. While 94 percent of operators receive training in their first three months of service (compared to 85 percent of owners), more than half of them do not receive this directly from the service provider; in fact, 22 percent receive training from their boss and 26 percent from another agent. This suggests that providers may not have visibility on the quality of training, how often trainings are given, and what content the training covers.

Training is important so that agents can provide consistent, high-quality customer experience, and in certain cases also help with sales of accounts and new products. If there is a high turnover of operators, offering this kind of service to anyone can be difficult, even more so to customers still new to DFS, who may rely on a human face to assure them that the service is trustworthy and will work for and help them. In fact, Intermedia reported two challenges to the adoption of DFS in Zambia: 1) Converting a user – familiar with DFS brands – to regular usage of a product; and 2) raising meaningful awareness among potential customers not familiar with DFS. It is, therefore, critical that agents at an outlet (of which 75 percent are operators) are trained sufficiently and repeatedly, because they have the potential to motivate customers to use DFS.

ANA Zambia further found that trained agents conduct a whopping six more transactions per day than their untrained peers. Thus, the high churn amongst operators could hurt the performance of agents and thus their income.

The Glue That Holds?

It’s not uncommon for DFS markets – such as Tanzania and Kenya – to have a high percentage of operators, and it need not be a negative trademark. An owner managing multiple outlets is a good sign of trust and optimism in the service and also enables owners to manage their liquidity better between their outlets.

So how can Zambian providers translate this optimism and trust to newly joined operators? Some quick wins could be:

  • Creating a compact training program for new operators
  • Developing a training of trainer model for owners
  • Setting operator recruitment criterion for owners
  • Testing different monetary and non-monetary incentives for operators who perform well

Nonetheless, it is necessary for providers to conduct a deep dive exercise to understand this phenomenon fully. In Zambia’s nascent market and indeed impressive comeback to DFS, providers will want to ensure their agents plant themselves deep into Zambian communities and reap trust to seed the demand of potential Zambian customers.

Editor’s note: This post originally appeared on the Helix Institute of Digital Finance website and is reprinted here with permission. 

Akhand Tiwari is a senior analyst at MicroSave and Maha Khan is the senior research manager of the Agent Network Accelerator Programme at the Helix Institute of Digital Finance.

Photo by Simon Berry, via Flickr.


financial inclusion, mobile finance